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OSullivan Corp. purchased 7 5 % of the outstanding shares of Rabb Ltd . on January 1 , Year 3 , at a cost of

OSullivan Corp. purchased 75% of the outstanding shares of Rabb Ltd. on January 1, Year 3, at a cost of $117,000. Non-controlling interest was valued at $35,000 by an independent business valuator at the date of acquisition. On that date, Rabb had common shares of $50,000 and retained earnings of $30,000. Fair values were equal to carrying amounts for all the net assets except the following:Carrying AmountFair ValueInventory$30,000$19,000Equipment45,00069,000Software15,000Tap the table to full screenThe equipment had an estimated remaining useful life of six years on January 1, Year 3, and the software was to be amortized over ten years. OSullivan uses the cost method to account for its investment. The testing for impairment at December 31, Year 6, yielded the following fair values:Software$8,000Goodwill20,000The impairment loss on these assets occurred entirely in Year 6. Amortization expense is grouped with administrative expenses, and impairment losses are grouped with miscellaneous expenses. The parents share of the goodwill noted above is $16,364.The following are the financial statements of OSullivan Corp. and its subsidiary Rabb Ltd. for Year 6:BALANCE SHEETSAt December 31, Year 6OSullivan Corp.Rabb Ltd.Cash$$10,000Accounts receivable40,00030,000Note receivable40,000Inventory66,00044,000Equipment, net220,00076,000Land150,00030,000Investment in Rabb117,000$593,000$230,000Bank indebtedness$90,000$Accounts payable70,00060,000Notes payable40,000Common shares150,00050,000Retained earnings243,000120,000$593,000$230,000Tap the table to full screenSTATEMENTS OF RETAINED EARNINGSYear ended December 31, Year 6OSullivan Corp.Rabb Ltd.Retained earnings, January 1, Year 6$153,000$92,000Net income120,00048,000Dividends(30,000)(20,000)Retained earnings, December 31, Year 6$243,000$120,000Tap the table to full screenINCOME STATEMENTSFor the year ended December 31, Year 6OSullivan Corp.Rabb Ltd.Sales$821,000$320,000Investment income15,0003,600836,000323,600Cost of sales480,000200,000Administrative expenses40,00012,000Miscellaneous expenses116,00031,600Income taxes80,00032,000716,000275,600Net income$120,000$48,000Tap the table to full screenAdditional InformationThe notes payable are intercompany.Required:(a)Prepare the Year 6 consolidated financial statements.(Input all values as positive numbers. Leave no cells blank - be certain to enter "0" wherever required. Round your intermediate computations to nearest whole dollar value.Omit $ sign in your response.)OSullivan Corp.Statement of Consolidated Retained EarningsYear ended December 31, Year 6(Click to select)Balance December 31Balance January 1$(Click to select)Net incomeNet loss(Click to select)Add: DividendsLess: Dividends(Click to select)Balance January 1Balance December 31$Tap the table to full screen(b)Calculate goodwill impairment loss and non-controlling interest on the consolidated income statement for the year ended December 31, Year 6, under the identifiable net assets method.(Omit $ sign in your response.)Goodwill impairment loss$NCI identifiable net assets methodTap the table to full screen(c)This part of the question is
\table[[Bank indebtedness,,],[$90,000,$not part of your Connect assignment
OSullhan Corp purchased 75% of the outstanding shares of Rabb Lid. on January 2, Year 3, at a cost of $17,000. Non-contrclling Interest was valued at $35,000 by an independent bushess valuator at the date of acquisition. On that date, Rabb had common shares of $50,000 and retained earnings of $30,000. Fair values were equal to carryhg amounts for all the net assets except the following:
\table[[,Carrying,],[,Anount,Fair Value],[Imventery,$30,000,$19,008 Prepare consolidated income
Statement for year 6
Statement of consolidated retain earnings
Consolidated balance sheet at year 6
Calculate goodwill impairment loss and nci on consolidated income statemdntent for the year 6 ended under the net assets method.

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